Cultural heritage and economic development: measuring sustainability over time

This study investigates the role of museums and cultural heritage in local development, highlighting their ability to attract tourists, generate revenue, and promote inclusion and cultural diversity. According to traditional economic theory, cultural heritage provides positive externalities, enhancing employment and improving human and social capital, all while adhering to principles of sustainability. In this context, the Italian Survey on Museums and Other Cultural Institutions offers extensive data on heritage conservation, accessibility, and visitor services. Utilising this longitudinal data, we conduct a latent transition analysis to examine the evolution of the Italian museum sector with a focus on regional differences and museums’ dimension. Our findings classify Italian museums into three homogeneous sustainability states. Additionally, museum size positively affects both the initial and transition probabilities, while the macro-area significantly influences only the initial probability. • Cultural heritage provides positive externalities, enhancing employment and improving economic growth, all while adhering to principles of sustainability. • Define and classify Italian museums based on sustainability is challenging. • Using longitudinal data on The Italian Survey on Museums and Other Cultural Institutions we carried out a latent transition analysis to propose a classification of Italian museums and to analyse changes (in class membership) over time. • Main findings suggest a classification for Italian museums into three homogeneous sustainability states.